Question

Salid is selling a team jersey. The total variable cost is $16.50. The desired profit margin is 40 percent. Which is the correct price for an individual jersey?

(1 point)
Responses


Image with alt text: $16.50 divided by left parenthesis 1 minus 0.40 right parenthesis equals $27.50


Image with alt text: $16.50 divided by left parenthesis 1 plus 0.40 right parenthesis equals $27.50


Image with alt text: $16.50 divided by left parenthesis 1 times 0.40 right parenthesis equals $41.25

Answer 1

To calculate the correct price for the individual jersey considering a desired profit margin of 40 percent, you can use the following formula:

\[
\text{Selling Price} = \frac{\text{Total Variable Cost}}{1 - \text{Desired Profit Margin}}
\]

Where:
- Total Variable Cost = $16.50
- Desired Profit Margin = 40% = 0.40

Plugging in the numbers:

\[
\text{Selling Price} = \frac{16.50}{1 - 0.40} = \frac{16.50}{0.60} = 27.50
\]

So, the correct representation is:

**Image with alt text: $16.50 divided by left parenthesis 1 minus 0.40 right parenthesis equals $27.50**

This means the correct price for an individual jersey is **$27.50**.